Question

financial issues in the healthcare industry

Answer 1

Healthcare is one of the critical industry in the world and proper financial management of the industry is of atmost importance for the succes of a Healthcare institution as well as for the benefit of the society. Financial management includes managing the funding for daily operations, contracts & negotiation, payrolls, raising capital, risk management etc.

There are many financial challenges and issue that are faced by healthcare industry. Some of them are

• Managing the investment- return of the projects. Not all investments in healthcare will be for profit and many will be for public health improvement. Healthcare institutions are restricted in terms of profitability in many areas. Even in such a restricted scenario, critical investments can bring the much needed returns and thus profitability of an institution.
• Managing the cost of treatment and operations: The increasing payscales of doctors, staff and the cost of equipments used in medical industry is a challenge for the healthcaare. If not properly managed it can severly affect the profitability of the institution.
• Delayed insurance payments: Many times insurance company delays the payment due to one or the other reason and because of this the cash in hand of healthcare institution is low. This can affect the working capital management ins industry as for funding they need to take short term liabilities.
• Maintenance of the facility: There is a significant cost that has been spend to maintenance of healthcare facility due to its costly equipments. Many equipments are difficlut to replace and configure and becasue of this high maintenance for these equipment as well as for the building has to be taken care.
• Difficult to find new funding: Many large investors tend to stay away from investing in healthcare as it is a brick and mortar industry as well as it takes its own time to produce a sound return.